Understanding Section 139 of the Income Tax Act, 1961

Section 139 of the Income Tax Act offers guidelines on how taxation of late filing of various returns are to be treated. The section provides the framework for when taxpayers have failed to file their returns within the stipulated time.

All in all, it is designed to offer means to rectify non-submission of Income Tax returns within the given timeline. Section 139 comes with multiple divisions like Section 139 (1), Section 139 (3) and likes to deal with a specific situation or instance.

There are a number of sub-sections under Income Tax Section 139. Here’s a quick overview: 

1. Section 139 (1)

Section 139(1) of the Income Tax Act outlines the provisions for voluntary and mandatory (obligatory) returns filed by the taxpayers. It also lists certain entities that are exempt from filing their taxes under sec. 139 (1C).

2. Section 139(3)

This section provides a framework on how eligible business entities or individuals should file their income tax returns if they have suffered a loss. 

3. Section 139(4)

This subsection of Sec 139 provides the framework for when you miss filing your return. According to this, any taxpayer can file belated returns. However, it should be within one year from the end of the relevant assessment period or before the end of the assessment, whichever is earlier.

4. Penalty Under Section 139(4) of the Income Tax Act

If you don’t file your returns on time, you may be charged with a penalty of ₹5,000 under Section 271F. However, no penalty shall be levied if filing is not mandatory as per the provisions of Sec 139(1) of the Income Tax Act.

5. Section 139(4A)

This subsection of Section 139 of the Income Tax Act deals with returns of religious or charitable trusts. All individuals and entities who have received income from any property being retained under trusts and other legal obligations must file their returns. 

6. Section 139(4B)

Under this section, political parties must file Income Tax returns if the entire income is over the exemption limit. The aggregate income calculated for this reason should exclude the effects of provisions under Section 13(A). 

7. Section 139(4C) and Section 139(4D)

Section 139 (4C) offers a framework detailing the type of institutions that are required to file tax returns if they exceed the exemption limit. However, Section 139 (4D) requires taxpayers to file their returns after the due date has passed.

8. Section 139(4F)

Every investment fund that’s been mentioned under Section 115UB must file returns under this subsection of Section 139 of the Income Tax Act. They need not furnish any return for income or loss under any other provisions of the section. 

9. Section 139(5)

This subsection under Section 139 of the Income Tax Act offers a framework to deal with revised returns. However, this provision is applicable only if the ITR was filed on time. The revised return can be filed anytime during the year or the relevant assessment period, whichever is earlier.

10. Section 139(9)

Section 139(9) of the Income Tax Act deals with defective returns. As per the provisions, a return will be considered defective if it is missing important documents and proofs. The assessee will be informed about the same and will be given the chance to rectify it within 15 days of receiving the intimation.

There are different forms of error codes under Section 139 of Income Tax Act, 1961. They have a list of defects for the assessee for receiving defective return notice. Here is a look at some of the error codes under Section 139 of Income Tax Act, 1961.

• Error Code 14

ITR is treated as a defective return when the assessee provides a negative amount in gross profit or net profit sections.

• Error Code 8

If the total income under Section 44AD is less than 8% of gross turnover/gross receipt and the assessor submits ITR-4S, it will be treated as a defective return.

• Error Code 31

It is displayed when a taxpayer is having income under the head “Profits and Gains of Businesses and Profession”, but has not filled the Balance Sheet and Profit and Loss Account.

• Error Code 38

This code is shown when tax is determined as payable in the return of income filed but not paid.

Section 139 has different subsections that deal with various kinds of tax returns as well as different scenarios of mistakes and delays in filing returns. Therefore, a few due dates are set for return filing. 

 

As per Section 139 of the Income Tax Act, you must file your returns within the following due dates:

 

If you are not required to audit your books, ensure that you file your ITR before July 31 of every assessment year. File your ITR within this period if you fall under any of these categories: 

• Paid with a wage

• Self-employed

• A consultant or freelancer
   

On the other hand, if you are legally required to audit your books, ensure that you file returns before September 30 of the assessment year. File your ITR within this due date if you fall under any of these categories: 

• You own a business 

• You are a self-employed person 

• You are a working professional

• A working partner employed with a firm 

• You are a consultant who is required to conduct an audit of his/her accounting book

This form is applicable to all the institutions, individuals and entities that are required to file ITR under Section 139(4A), 139(4B), 139(4C) and 139(4D). ITR Form 7 can be filed in any of the following manners with the Income Tax department:

• Electronically with a digital signature

• Electronically transmitting data followed by submitting verification of the return in the ITR-V Form

• In paper form

• Furnishing return that is bar-coded

As mentioned, a notice of defective return is given when not all the necessary information or required documents are submitted with the return. The notice is issued under Section 139(9). You get 15 days from the date of receiving this notice to rectify these defects in the return. 

 

Here is a step-by-step guide on how to file the defective return u/s 139(9):

1. Login on the official website at http://www.incometaxindiaefiling.gov.in/  

2. Navigate to the ‘E-Proceedings’ option under ‘Pending Actions’

3. Select “View Notices” and choose “Self” to view the notice issued, if any 

4. Click on “Submit Response” to respond to the notice 

5. Choose ‘Agree’ if you agree to the notice and select your mode of response 

6. Proceed with the ITR form displayed if you choose the ‘Online ITR Form’ mode

7. Upload the JSON/XML file if you choose the ‘Offline Utility’ mode

8. Click on ‘Continue’ once done

9. Choose from the list of options if you ‘Disagree’ with the notice

10. Select the declaration box and proceed to e-verify your response